Shipping & Fulfillment

Comparing UPS, FedEx, and USPS: Which is Best Now?

Shipping costs are an ongoing challenge for ecommerce merchants, who compete head-to-head over free shipping and seek to avoid shopping cart abandonment. Given this competitive environment, knowing which carrier is best can be a huge advantage.

In March, L.L. Bean announced that it would begin offering free shipping on every order, all the time, regardless of the total amount spent or the weight. This bold and customer-pleasing move has a significant number of merchants offering free shipping in many more circumstances, and by some estimates 75 percent of online retailers will offer some form of free shipping this holiday season. Since UPS, FedEx, and the United States Postal Service (USPS) all want to get paid for their services, rates become vital to merchants.

Separately, Forrester, the analysis firm, has reminded us of another shipping-related challenge for online retailers: Something like 44 percent of abandoned shopping carts are dumped because the customer deemed the shipping costs to be too high. Given that overall cart abandonment rates rose to 75 percent in the first six months of 2011, according to SeeWhy, the conversion and remarketing firm, retailers need to do everything they can to lower shipping costs.

Shipping Costs

To determine which service had the best rates, I compared published rates for eight destinations for a 2-pound package (Wrangler jeans) and 12-pound package (White’s Elk Guide Boots), both shipped from Caldwell, Idaho 83605. The destinations are: New York 10001; Boston 02109; Orlando 32801; Pine Bluff, AR 71601; Des Moines 50301; Devil’s Lake, ND 58301; Seattle 98101; and Santa Barbara 93108.

For the USPS, I looked at “Priority Mail” only. For FedEx, I reviewed “Home Delivery,” “Express Saver,” “Two Day,” “Overnight,” and “First Overnight.” For UPS, I looked at “Ground,” “Three Day,” “Two Day,” “Next Day,” and “Next Day Early.”

Comparing Shipping Rates: USPS, FedEx, UPS

New York 10001 Boston 02109 Orlando 32801 Pine Bluff 71601 Des Moines 50301 Devil’s Lake 58301 Seattle 98101 Santa Barbara 93108
White’s Elk Guide Boots, 12 lbs.
USPS Priority $34.39 $34.39 $34.39 $29.96 $26.33 $23.36 $17.04 $23.26
FedEx Home Delivery $12.77 $12.77 $12.77 $11.44 $9.71 $10.68 $8.12 $8.67
FedEx Express Saver $50.27 $50.27 $50.27 $43.34 $39.16 $30.51 $24.85 $28.40
FedEx Two Day $67.15 $67.15 $67.15 $55.04 $50.28 $42.08 $32.66 $39.96
FedEx Overnight $107.11 $107.11 $107.11 $104.71 $101.16 $94.36 $83.59 $92.23
FedEx First Overnight $150.91 $150.91 $150.91 N/A $143.87 $132.36 $122.06 N/A
UPS Ground $22.64 $22.64 $22.64 $20.57 $17.96 $19.20 $15.32 $16.22
UPS Three Day $56.37 $56.37 $56.37 $50.96 $46.17 $37.11 N/A N/A
UPS Two Day $83.33 $83.33 $83.33 $80.77 $75.13 $54.04 $37.05 $50.50
UPS Next Day $133.89 $133.89 $133.89 $130.99 $126.43 $107.56 $103.06 $104.42
UPS Next Day Early $159.23 $159.23 $159.23 $15.33 $151.77 $117.25 $138.40 $114.11
Wrangler Jeans, 2 lbs.
USPS Priority $9.37 $9.37 $9.37 $8.36 $7.86 $7.16 $5.58 $7.16
FedEx Home Delivery $7.12 $7.12 $7.12 $6.68 $6.74 $8.34 $6.21 $6.33
FedEx Express Saver $19.41 $19.41 $19.41 $15.60 $15.34 $14.54 $12.37 $12.42
FedEx Two Day $24.79 $24.79 $24.79 $23.76 $21.81 $18.84 $14.08 $16.72
FedEx Overnight $55.02 $55.02 $55.02 $52.84 $50.78 $47.98 $42.14 $45.86
FedEx First Overnight $90.40 $90.40 $90.40 N/A $85.59 $79.98 $75.74 N/A
UPS Ground $13.76 $13.76 $13.76 $10.76 $13.25 $15.57 $12.35 $12.59
UPS Three Day $25.48 $25.48 $25.48 $20.63 $22.23 $20.75 $20.01 $23.14
UPS Two Day $32.72 $32.72 $32.72 $28.39 $29.24 $26.28 N/A N/A
UPS Next Day $69.25 $69.25 $69.25 $63.50 $64.13 $56.60 $53.58 $53.47
UPS Next Day Early $104.60 $104.60 $104.60 $98.84 $99.47 $61.28 $88.92 $58.14

I also specified in all cases that I would be shipping to residential address since this is normal for online retailers.

In six of the eight cases, FedEx Home Delivery was the least expensive option. For the two nearest destinations, USPS Priority Mail, which is significantly faster, was the least expensive option. So if a merchant is going to offer free shipping, FedEx Home Delivery is worth checking out.

For the fastest of overnight services, FedEx was again the low cost service most of the time, although UPS had better rates to Devil’s Lake, and offered service to all of the locations, while FedEx did not.

In the end, FedEx generally had the best shipping prices.

Packing Material

All of the carriers offered free boxes for some of their premium shipping services. For example, UPS provides Two Day and Next Day boxes. But far and away, USPS had more free-box options. Moreover, those boxes were for its Priority Mail service, which was less expensive.

Boxes are not cheap, in fact, some can cost $1 each or more; getting free packaging is not small thing.

In terms of free packing materials, advantage USPS.

Customer Service

For the first time in years, UPS has outscored FedEx on a customer service survey. In June, the American Customer Satisfaction Index released a report giving UPS a 4 percent gain to a score of 85, while FedEx dropped 2 percent to a score of 83.

Recently, UPS has also done better at delivering on time (about 91 percent) versus FedEx (about 88 percent), although FedEx tended to be faster overall. In the past, UPS has tended to trail FedEx, while USPS tended to be the butt of a joke.

In short, for customer service, it’s a tie between FedEx and UPS.

Software

All major carriers now offer software and APIs for order processing and integrating, respectively. Generally, all three services work well and are very functional. I found FedEx’s software and API to be the easiest to work with, but this is a purely subjective response.

So, for software, here again we have a tie.

Which Carrier Is Best?

Each carrier has a lot to offer. For example, USPS Priority Mail is an excellent choice for fast, low-cost shipping, and USPS is the only carrier that does not charge extra for Saturday delivery or that can service post office boxes.

UPS had the largest ground fleet with an estimated 101,900 trucks (or “package cars,” as the company calls them).

FedEx was the leader in prices, and the most green, with 329 hybrid vehicles, 19 electric vehicles, and 406 alternative fuel vehicles.

So, which is best? The bottom line is that it depends on what you ship, where you ship it and what packing-materials needs you have, if any. It depends on your customer service needs, and your sensitivity to environmental issues. The best solution for your ecommerce business may not be the best for mine. It depends.

Armando Roggio

Armando Roggio

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